Stocks Rise as Trade Tensions Ease; Dollar Drops: Markets Wrap

(Bloomberg) -- U.S. stocks rose for a third day as signs mounted that President Donald Trump may still be assessing the most severe protectionist policies. The dollar declined against peers.

The S&P 500 advanced as comments by the president’s allies -- including House Speaker Paul Ryan, White House economic adviser Gary Cohn and Senator David Perdue -- have added to pressure on Trump to ease off implementing steep tariffs on steel and aluminum. During a news conference Tuesday, Trump didn’t back down from his tough trade talk. Chipmakers rallied after a positive research note from Goldman Sachs, while materials producers gained amid a rise in metals prices.

Investors remained focused on the potential tariffs that have caused America’s largest trading partners to warn of a backlash. An apparent diplomatic breakthrough on the Korean Peninsula added to risk-on sentiment. Treasuries were flat after CVS Health Corp. kicked off the third largest corporate-debt financing ever.

“Last year was a very unvolatile year, that was abnormal -- normal is more volatility,” said Stephen​ Lee​, a founding partner at Pennsylvania-based Logan Capital Management, which manages $1.9 billion. “You have to go through the knee jerk reactions, then step back and say, ‘Well is this a problem’? This tariff issue, it seems there’s a lot of noise, but our experience is with any sort of legislative thing it takes longer to get through.”

Meanwhile, emerging-market stocks rose after five days of declines, and Europe’s peripheral bonds advanced. Italian stocks advanced alongside the country’s bonds as the potentially lengthy process of forming a new government got under way.

Terminal users can read more in our markets blog.

Here are some key events coming up this week:

• The Chinese People’s Political Consultative Conference runs through March 15 and overlaps with the National People’s Congress meetings in Beijing, through March 20.
• Australia GDP data is due Wednesday.
• The ECB isn’t expected to change policy on Thursday, but the Governing Council may discuss a change to pave the way for the end of quantitative easing. 
• BOJ monetary policy decision and briefing on Friday.
• U.S. monthly payrolls data come Friday.

These are the main moves in markets:

Stocks

• The S&P 500 Index rose 0.3 percent to 2,728.12 as of 4 p.m. New York time.
• The Stoxx Europe 600 Index climbed 0.1 percent.
• The U.K.’s FTSE 100 Index rose 0.4 percent.
• The MSCI Emerging Market Index advanced 1.9 percent, the largest increase in almost three weeks.

Currencies

• The Bloomberg Dollar Spot Index declined 0.4 percent.
• The euro gained 0.6 percent to $1.24, the strongest in more than two weeks.
• The British pound rose 0.3 percent to $1.3896.
• The Japanese yen advanced 0.1 percent to 106.14 per dollar.
• The MSCI Emerging Markets Currency Index gained 0.7 percent to the highest in more than a month.

Bonds

• The yield on 10-year Treasuries were steady at 2.88 percent.
• Germany’s 10-year yield climbed three basis points to 0.68 percent.
• Britain’s 10-year yield climbed three basis points to 1.521 percent.

Commodities

• West Texas Intermediate crude fell 0.1 percent to $62.48 a barrel.
• Gold rose 1 percent to $1,333.77 an ounce.

--With assistance from Samuel Potter Kailey Leinz and Sarah Ponczek

To contact the reporter on this story: Randall Jensen in New York at rjensen18@bloomberg.net.

To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Todd White

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